Q&A with Mark Skinner, Vice President, State Science & Technology Institute
Mark Skinner is Vice President of SSTI and director of the Regional Innovation Acceleration Network Project. He has participated in technology-based economic development for 27 years, working for Ohio's Thomas Edison Program, establishing Ohio's SBIR assistance program and consulting on several Battelle directed projects prior to joining SSTI in 1998.
Q: What is RIAN and how does the website promote the initiatives?
A: The Regional Innovation Network (RIAN) is in part an economic development community response to the President's call in his State of the Union address for the nation to "out innovate" the rest of the world. Within weeks of taking their positions with EDA, Assistant Secretary Fernandez and Deputy Assistant Secretary Brian McGowan posed a similar challenge to SSTI and some its members: how do we make our economic development strategies more innovative at the same time we're helping high growth startup companies create jobs and wealth? RIAN evolved out of months of talks with EDA, SSTI staff and tech-based economic development practitioners.
We know every public dollar invested in science, technology, innovation and economic development needs to have the greatest impact possible because the demands on public funding are many. So the RIAN project represents the beginning of several different activities around the central theme of helping make all economic development more effective and capital efficient. And it's really exciting to see how eager so many organizations within the entire economic development community are to try something new or look at regional growth strategies in a slightly different way.
The RIAN website has three main elements to help transform economic development. Not too surprisingly, the elements correspond closely to the acronym:
- Innovation Acceleration
Regionalism. The RIAN website outlines a “clean slate” perspective on understanding regional innovation system theory – which is a high brow way of saying understanding how economic growth in a global era is based almost entirely on creating and adopting innovation. We think knowing how your regional economy really works – and I can almost guarantee it doesn’t follow closely with most of the political lines we’ve drawn on the maps – is an important starting point.
The RIAN website begins with the premise that we’re all in this together, the entire economic development community. You’ll see that within the graphic image and links provided on the “About RIAN page.” Our community has a lot to gain by convening and sharing thoughts on how to out innovate the world. RIAN is built around the idea that we have to do that on a region-by-region basis to a large degree. On the Guiding Principles page in the “About” section, you’ll see the 12-step thinking that led to RIAN’s existence.
EDA has made a lot of important investments in providing tools for regional assessment, like Know Your Region and the upcoming Cluster Mapping project. The RIAN website brings those along, adds a little and provides a regional innovation system perspective to all of it. That’s explored under “Regional Assets” of the VDO Basics section of the site.
Innovation Acceleration. The next element of RIAN is exploring the concept of Venture Development Organizations as a successful, new tool in the regional innovation support portfolio. This stems from what SSTI has observed over the past 15 years – the emergence of a new group of public-private economic development entities that don’t neatly fit any of the usual weapons in the arsenal of innovation/economic development support mechanisms (incubators, technology parks, research centers, SBDCs, EDDs, CDCs, state grant programs, etc).
RIAN is about working with the innovation support community to develop a working definition for VDOs, to understand how VDOs differ from other strategies, to show that VDOs are successful, and to introduce the VDO concept to more regions of the country to consider designing their own.
The key to this is to show genuine economic impacts and the RIAN website is full of this stuff: hard data on job creation numbers, wages paid by client companies, private investment attracted, and revenues earned. This stuff really works. And it is working in lots of very different places in the country. Mostly, RIAN holds, because the approaches are tailored to the specific assets of the region – including the human talent and the financial resources available.
And the final element of RIAN really focuses on the N work in the acronym: Network. To out innovate we need to work together. Companies succeed only when they work with others and communicate with others (particularly their customers). Same goes for economic development. We have to break down barriers to the economic development community talking with each other, regardless of which bubble in the “About RIAN” image on our website groups historically fit. So the RIAN website and activities will be about sharing and celebrating success of client companies, best practices, and lessons learned. These pieces will be developed as the website community grows, but we’ll start with some webinars and open conference calls to let people talk about some of the key issues to regional innovation support in these challenging times.
Q: Discuss the importance of Venture Development Organizations and cite examples of how these entities are driving economic and job growth.
A: VDOs, in my opinion, represent one of the, if not the, most promising approaches for the future success of economic development. I could get really bogged down on why: like the increasing pressures and trends on public finances and expenditures; the increasing number of entire industries that are looking to outsource product innovation and development; the rapid ascent of competent global competition; the environmental, energy and global challenges requiring unconventional or at least new thinking; recruitment and build-it-and-they’ll-come strategies are zero sum; the need for universities to sustain and excel at their core missions of education and scientific discovery, etc.
Instead let’s suffice to say: economic development needs to become as entrepreneurial and efficient as the startup/high growth companies we recognize are drivers of the economy. A well-resourced VDO represents just that – adapting and adopting tech entrepreneurship to fit the world of tech-based economic development policy and practice.
VDOs are flexible, company-focused, lean, multifaceted, regionally grounded, nonprofit organizations that help high growth, innovation/tech based companies to succeed. Nearly all have direct financial resources to invest in a company (could include small working capital grants, providing due diligence support for angel networks or organizations, convertible debt or as is quite often the case direct earliest stage equity capital). They have a financial orientation or acumen that mirrors the private equity community more closely than a traditional state, federal or university grant program or even SBIR. Most are agnostic to the source of the technology a company or entrepreneur might be commercializing. That doesn’t mean the VDO can’t be sector-focused. VDOs can fit very well in a cluster-based strategy to encourage growth. Instead the agnosticism means the VDO is open to high growth business opportunities from any source – a university, a federal lab, an SBIR award, the private company, students, or technologies developed on the other side of the world.
VDOs are about the business of innovation-based economic development. That pervades the organization from the corporate leadership on the board, the VDO management and staff most often having direct, personal experience as entrepreneurs or in small tech firms themselves, and the institutionalized commitment to regular assessment of progress. Just as their client companies have to focus on their bottom lines, VDOs see regular impact measurement as sacrosanct.
In developing the characteristics of a VDO, SSTI worked with more than 100 organizations around the country that we felt had some or all of the qualities we thought would end up in the definition of a VDO. As we narrowed the list to the current 16 characteristics website visitors will find under “VDO characteristics” in the VDO Basics section, the organizations polled said the most important quality to be considered a VDO was the commitment to regular measuring of impact and performance.
Q: How can economic professionals leverage this tool to enhance their current development efforts and create thriving economic ecosystems?
A: At this point there are only a dozen or two really strong models of VDOs around the country, and several dozen more VDO-ish organizations that need to be supported, and hundreds more that could become VDOs.
Reflecting on the current list of VDO characteristics and the metrics that matter, and even the guiding principles for RIAN, that there is something here for everyone to consider for their own practice. RIAN represents an opportunity for improvement for all of the economic development community.
So far, people can have at least two reactions to what’s here: They can be inquisitive and open to the concepts. Or they can say there’s nothing in this for me because this doesn’t apply to my organization because we’re a conventional recruitment & expansion economic development group or we’re in a rural area or we don’t have a bunch of techies or lab coats running around town.
I am saddened by the second group because they are limiting their options for improving the impact of their economic development efforts. So far, there aren’t a lot of members to the second group in my encounters since we launched the site. I think the VDO profiles and success stories reveal this can happen anywhere – with the right commitment to creating the opportunity for it to happen.
So I encourage people to spend a little time exploring the site objectively and patiently, without considering what presently is going on in your organization. Read through the guiding principles. Go through the VDO Basics on regional assets, VDO characteristics, metrics that matter. Explore some of the specific client success stories, look at the impact data. It takes some time, I know. Sometimes change does.
The next step is to bring the vitals – the metrics and VDO characteristics – into thinking about your own organizations, the others within your region, and your own experiences. If nothing else, we need to adopt more of the rigorous impact measure and performance practice of the VDOs.
And we need to sing client successes more; particularly the ones we think are small. It’s easy to think the headlines should be full of the big company expansions or relocations with hundreds or even thousands of jobs for an area. That’s great news and cause for celebration in the community, like a wedding or graduation in a personal life.
But our personal lives aren’t weddings and graduations every day. And neither is real regional growth. It’s one innovation company creating a few jobs that pay better than average wages and another one doing the same thing. Then another one and so on. Keep doing it and you’ve built some resilience into your regional economy so when the inevitable headlines come about plant closings and job losses, you are already bouncing back because of your investments in regional innovation.
Keeping up with the analogy, there are a lot of steps along the way to getting your kids through school or planning a big wedding. Same for growing innovation based economies. VDOs regularly share their numbers and celebrate client successes, help people to see it’s a process, it’s all intertwined in the region’s growth, and it’s done one venture at a time.
The RIAN project and website try to convey that too. Region by region. VDO by VDO. Company by company. We’ll help companies out-innovate the rest of the world if we, the economic development community, set our minds to being more innovative, too.
Q: What is the State Science and Technology Institute's role in advancing the innovation economy?
A: SSTI has a pretty lucky position at the merger of innovation and economic development. I won’t say unique because that word is so overused, but we’ve managed to maintain a perspective on technology-based economic development policy and practice that strives to be comprehensive, strategic or holistic. The economic development field needs all of the associations that are dedicated to improving the practice of individual aspects of a regional innovation economy. Those associations provide valuable professional development opportunities for individuals within the different approaches to economic development and educate the broader public on the important roles those approaches serve. SSTI adds something slightly different but critical to the mix by looking at how all the pieces fit together into a shared strategy (whether implicitly or explicitly). Then collectively, asking how to make things work better.
Since SSTI was founded in 1996, we’ve served a role as observer, convener, reporter, facilitator, independent think tank, educator, neutral intermediary, and occasionally provocateur for the field – primarily focused on technology-based economic development or TBED. From day one, we’ve approached TBED as a public-private partnership that requires the active participation of government, industry, academia, and private and civic organizations. That holistic approach provides the opportunity to develop and espouse a different perspective than may normally be encountered
The RIAN project fits well with that organizational personality and the approach to developing the network, the conceptual definition of VDOs, and the community engagement. RIAN encapsulates the community aspects of SSTI’s core missions of understanding practice, advancing best practices and maintaining impartiality toward the common goal of advancing economic growth through investments in science, technology and innovation.
FEATURE ARTICLE: Seikowave captures and improves life in 3D
Special to EDA from the University of Kentucky
A new Lexington-based high-tech company, Seikowave Inc., wants to improve lives by making three-dimensional imaging faster, cheaper and more accessible. The company's 3D technology under development in Daniel Lau's University of Kentucky lab has multiple potential uses from improving medical practices to making cars safer to drive.
Seikowave formed in early 2010 with Lau's real-time 3D measurement research as the cornerstone. The company has since created a versatile platform for 3D imaging that is already being tested for medical and industrial uses.
What makes Seikowave's technology different from current 3D imaging technology is the simple projection system that captures 3D images. Current systems typically use expensive optics and electronics, similar to the technology found in multi-function business projectors. And current systems often cost between $50,000 and several hundred thousand dollars. Seikowave uses optics similar to those found in digital cameras.
Seikowave co-founder, CEO and president Matt Bellis currently works full time with chief operating officer and co-founder Minoru Niimura at the Japan office, a location that gives the company access to suppliers, customers and some funding sources. "Japan provides us with great access to the cutting edge optics that we need in our 3D imaging systems," Bellis said. "But the cutting edge 3D imaging technology is in Lexington."
In their ASTeCC campus incubator lab, Lau, Seikowave co-founder and chief technology officer, and two software engineers are developing the software for the different applications of the technology, as well as maximizing the full performance of the 3D measurement module. What makes the Seikowave technology unique is its speed.
"We can process the incoming structured light video on a standard PC at rates up to and around 150 frames per second," said Lau, UK electrical and computer engineering. "The fastest rate we could find reported in the research literature was 25 fps."
One of the first applications for this new technology is dentistry. Using the new system, dentists will be able to make immediate intra-oral 3D measurements of teeth versus the traditional method of making dental impressions and molds.
While other companies have 3D dental systems on the market, Bellis found that dental offices in Japan were not using those systems. "Intra-oral dental systems from other companies are too large," Bellis said. "They don't fit the needs of the Japanese market. We designed ours to be smaller than any others on the market."
Seikowave is working on several other applications for the technology. The company has partnered with a Japanese automobile manufacturer to adapt the technology for tire inspection. Seikowave has also partnered with another company to use 3D measurement to test lung function in infants, unconscious patients and other people who are unable to breathe into a tube.
"We are focused on improving lives through innovation," Bellis said. "Non-contact lung-function testing will provide doctors with a measurement tool that they have never had before. Car tire inspections using our technology will reduce cost and improve safety. Intra-oral dental measurements will enable dentists to deliver a high quality of patient care at a lower cost."
Seikowave is a client of UK's Von Allmen Center for Entrepreneurship.The Von Allmen Center introduced Seikowave to the Bluegrass Angels and the state's early-stage funding programs, and helped the company locate to ASTeCC, the UK campus incubator.
"Without the Von Allmen Center's support, we would have had difficulty raising the initial capital needed to get started," said Bellis. "Having our lab on UK's campus near Dr. Lau has helped us quickly pull together the technical team needed to complete the design of our products." Bellis has hired two UK graduates to work in the ASTeCC lab.
Dean Harvey, director of the Von Allmen Center for Entrepreneurship, said, "We knew when we first started talking with Matt and Dan that they had a novel and flexible technology with broad applications to many markets."
The UK Office for Commercialization & Economic Development is the university's nexus for commercializing UK technology and creating spinoff companies and jobs. The office manages UK's patent and technology portfolio, and includes ASTeCC-AgTeCC campus incubators, Coldstream Research Campus, Kentucky Small Business Development Center, Kentucky Technology Inc., Lexington ICC and the Von Allmen Center for Entrepreneurship.
UK EDA University Center is part of the Von Allmen Center for Entrepreneurship
New Commerce Department Report Shows Record Services Trade Surplus that Continues to Grow
U.S. services driving overall exports growth, topping half a trillion dollars
The U.S. Department of Commerce's Economics and Statistics Administration (ESA) today released a report showing U.S. trade in private services totaled $526.6 billion in 2010, representing a trade surplus that is growing, rising from $66.7 billion in 2003 to $168 billion in 2010.
The first in a series of ESA issue briefs, U.S. Trade in Private Services finds that U.S. services exports are leading the way toward doubling U.S. exports in support of several million new jobs under President Obama's National Export Initiative. The trade surplus has grown quickly since 2003, and the increase in exports of private services has outpaced the rise in imports. Exports of services have grown an average of 9.2 percent per year, while imports have grown an average of 7.4 percent. Exports of private services account for nearly one third of all U.S. exports of goods and services.
“The findings reported today are a remarkable statement about the strength of America’s trade in services,” U.S. Commerce Secretary Gary Locke said. “While much attention is given to the overall trade balance–and the Obama administration is committed to working to narrow the trade deficit – today’s report highlights an often overlooked but important and increasingly robust dimension of America’s role in global trade.”
The brief, based on data from the department’s Bureau of Economic Analysis, points to the financial and business services sector as contributing the most to the U.S. trade surplus, in addition to significant contributions from education services, fees for software and industrial process licenses, and other royalties. Travel represented the largest category of exports of services by the United States.
By country, the largest U.S. surpluses in services are with Canada, Japan, Ireland, Brazil, the United Kingdom, China and Mexico. The U.S. services surplus with China has accelerated rapidly since 2007, from $2.4 billion to $10.4 billion in 2010, because of sharp gains in exports and relatively flat imports, according to ESA data.
Exports support more than 10 million American jobs, and those whose jobs depend on trade earn 13 to 18 percent more than the national average. As a result of administration policies and the global economic rebound, exports grew 17 percent in 2010 compared to 2009 – the largest year-to-year percent change in more than 20 years.
Private services are defined as non-tangible items of value that are either consumed when purchased or at a later date by their terms of sale, such as school tuition or an airplane ticket. These are distinct from tangible items, or “goods,” such as oranges or motor vehicles.
A copy of ESA’s U.S. Trade in Private Services issue brief can be found here.
DOL Needs Your Help to Connect Employers with Talented Young People
As the nation continues to recover from the deepest recession in decades, the challenges facing our young people have been especially difficult. Last summer, the unemployment rate among 16 to 24 year olds was 19.1 percent -- the highest since 1948. Nearly 4.5 million young people who wanted to work could not find jobs. For youth of color, the numbers were even worse with unemployment rates of 33.4 percent for African-American, 22.1 percent for Hispanic and 21.6 percent for Asian youth.
In 2009 and 2010, communities across the country used American Recovery and Reinvestment Act funds to directly support summer jobs for nearly 400,000 young people. Those Recovery Act dollars are gone and without dedicated funding the summer of 2011 could provide few opportunities for deserving young people.
In lieu of specific federally funded programs, Labor Secretary Hilda Solis is partnering with business leaders, elected officials and non-profits to highlight summer job opportunities for America's young people. The Department of Labor has launched www.dol.gov/summerjobs to facilitate these vital connections.
If your organization runs a summer jobs program, the Department of Labor would like to help you publicize your openings by making a commitment to hire.
For additional information and to make your commitment to summer jobs, please contact David Roberts at Roberts.email@example.com or 202-270-9439.
SBA Introduces New Mobile Application for Small Business Owners, Entrepreneurs
Click here to access app
Smart phone users interested in starting or growing a small business can now find helpful resources at their fingertips via a new SBA mobile application from the U.S. Small Business Administration. The mobile app will help users connect with SBA district office staff and SBA-affiliated counselors and mentors who can provide free, personalized small business assistance. The user-friendly format of the app will help answer questions such as: How do I start a business? Where can I go in my area to get free help with writing a business plan? And where do I begin finding funding for my business?
EDA’s Thoughts are with All Those Affected by the Recent Disasters
Over the past two months, President Obama has signed Disaster and Emergency Declarations for a number of states impacted by recent natural disasters, particularly in the South and Midwest. The National Weather Service estimates that, so far, over 500 people have been killed by this series of storms.
In a statement released by the White House on May 23, the President expressed his sympathy for the citizens of Joplin, Missouri: “Michelle and I send our deepest condolences to the families of all those who lost their lives in the tornadoes and severe weather that struck Joplin, Missouri as well as communities across the Midwest today. We commend the heroic efforts by those who have responded and who are working to help their friends and neighbors at this very difficult time. At my direction, FEMA is working with the affected areas’ state and local officials to support response and recovery efforts, and the federal government stands ready to help our fellow Americans as needed.”
In Alabama, the Alabama Emergency Management Agency and FEMA are offering Public Assistance grants in order to aid in the rebuilding of infrastructure in Alabama, particularly in Tuscaloosa. Information about FEMA assistance has been available online at www.DisasterAssistance.gov.
At EDA, our thoughts are with all of the impacted communities and the many families and individuals who have been affected by the recent disasters, as well as with the responders who are aiding in recovery efforts.
NEWS: New Leadership Coming to U.S. Department of Commerce
Recently, President Obama announced the nomination of John Bryson as the next Commerce Secretary and Terry D. Garcia as Deputy Secretary.
John Bryson: Nominee for U.S. Department of Commerce Secretary
Click here to learn more
Previously, John Bryson was Chairman and Chief Executive Officer of Edison International, the parent company of Southern California Edison and Edison Mission Group, from 1990 to 2008. He is a director of The Boeing Company, The Walt Disney Company and Coda Automotive, Inc., and is a senior advisor to KKR. He is chairman of the board of BrightSource Energy, the Public Policy Institute of California (PPIC), and the Keck School of Medicine of the University of Southern California (USC) Board of Overseers. He also serves as co-chairman of the Pacific Council on International Policy (PCIP).
Mr. Bryson is a trustee of the California Institute of Technology and a director of The California Endowment and the W. M. Keck Foundation. He serves on the Advisory Board of Deutsche Bank Americas. He also previously served on a number of educational and environmental boards, including as chairman of the California Business Roundtable, co-chairman of the Electric Drive Transportation Association (EDTA), trustee of Stanford University, and as a member of the U.N. Secretary-General's Advisory Group on Energy and Climate Change (AGECC). Bryson also served as president of the California Public Utilities Commission, chairman of the California State Water Resources Control Board, and on the board of the Council on Foreign Relations. At the start of his career, he was a co-founder and attorney for the Natural Resources Defense Council (NRDC), a national and international environmental group. He is a graduate of Stanford University and Yale Law School.
Terry D. Garcia: Nominee for Deputy Secretary, Department of Commerce
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Terry D. Garcia is currently Executive Vice President for Mission Programs at the National Geographic Society. In that role, he is responsible for the annual management of more than 400 scientific, conservation and exploration projects. In June 2010, Mr. Garcia was appointed by President Obama to serve on the National Commission on the BP Deepwater Horizon Oil Spill and Deepwater Drilling. Prior to joining the National Geographic Society in 1999, Mr. Garcia was Assistant Secretary of Commerce for Oceans and Atmosphere and Deputy Administrator of the National Oceanic and Atmospheric Administration (NOAA) at the U.S. Department of Commerce. He also served as General Counsel of NOAA. Before entering government service, Mr. Garcia was a partner in the law firms of Manatt, Phelps & Phillips and Hughes Hubbard & Reed. Mr. Garcia has served on various boards and commissions, including the Institute for Exploration/Mystic Aquarium, the Amazonian Center for Environmental Education and Research, the U.S. National Committee for the Census of Marine Life and the Harte Research Institute of Gulf of Mexico Studies at Texas A&M University. He is also a trustee emeritus of the National Marine Sanctuary Foundation and has served on panels convened by the National Academy of Sciences and the National Academy of Public Administration. He holds a B.A. from American University and a J.D. from The George Washington University.